Bernanke and the Financial "No Fly" List
Threats? We're used to them. Remember Brad Sherman talking about the threat of martial law if TARP did not pass? (oh wait, he's since decided that he's on team Obamacare so let's not give him any free PR, eh?)
Anyway. I'm shaking in my Pumas as we speak! (See also my December 25, 2009 Don't Throw the Fed in the Briar Patch)
Market Ticker brings us right back to the fall of 2008:
Remember this? $125 billion of "slosh", or excess liquidity, drained from the system in the four days from 9/19 - 9/24/2008.
To put this in perspective that was a drain of sixty-five percent of the total excess liquidity in the system - a "starvation diet" if you will - and that withdrawal was an intentional act!
The above is an irrefutable record of what The Fed actually did.
Remember that Bernanke's argument at the time was that the credit markets were suffering from a lack of liquidity. That is, there was no problem with firms actually being bankrupt, but they were illiquid.
If that's true why did Bernanke intentionally drain $125 billion from the system - two thirds of the market's total excess liquidity - instead of adding to it?
The post in question where KD calls out Bernanke for pulling the cash may be found here.
Fitting, as scare tactics are standard remedial political fare, aren't they? Oh look, here are some more threats, this time another "collapse" should Ben Bernanke not be confirmed for a second term as Fed Chairman. Threats eh? Classy.
A defeat of Federal Reserve Chairman Ben Bernanke's quest for another four-year term could raise the risk of a "double dip" recession if political jousting over a successor were to drag on for months, economists warn.
Still, the chance of Bernanke's defeat has unsettled Wall Street, contributing to last week's 4 percent loss by the Dow Jones industrial average, its worst performance in 10 months. If Bernanke were rejected, uncertainty over a successor would further roil global markets, at least in the short run.
Anxiety, along with sagging investments, could cause consumers and businesses to cut spending. Joblessness, already at 10 percent, could worsen. And the recovery might fail.
Economists who fear a double-dip recession - in which the recovery would collapse into another recession - regard it as a worst-case scenario. But they don't rule it out, either.
Oh please, Washington Post, I thought you were better than this. Really? It's the uncertainty of Bernanke's future that caused markets to seize up this past week? Haven't you ever heard of a market correction? Eventually the drunk has to step away from the punch bowl to go throw up on someone's shoes.
The end is nigh!!
(and all the transparent, weak little threats in the world can't change that. So suck it.)